Ukiah gets another rejection letter from the state

The City of Ukiah got another letter from the state of California telling it that some major projects the city had planned to spend redevelopment money on are not going to be approved.

Among them are about $6 million which the city spent or is planning to spend on land and road improvements to bring a Costco to town, and about $2.5 million in funding for downtown projects and the Ukiah Depot area.

Also rejected were a tens of thousands in staff expenses on redevelopment work.

With an eye to bringing more money into the state's coffers, California legislators in 2011 passed laws disbanding redevelopment agencies statewide. They said cities were abusing the program originally designed to turn around blighted urban areas by providing tax-paid boons to developers and using redevelopment to boost city staffing levels. Under redevelopment, cities were allowed to keep the property tax money generated by the development projects after paying the bond debts on them and the state decided that money should go back to funding schools and counties.

Ukiah Assistant City Manager Sage Sangiacomo said Friday evening that the latest letter from the state is just a another step in the process of untangling the mandates of these new state laws.

Sangiacomo said that the state analysts reviewing the many documents and lists of projects cities across the state are insisting should continue to be funded, are lower level employees who are basically just saying no to everything and "checking the boxes."

Now that this latest denial letter has arrived, Sangiacomo says the city has five days to request a "meet and confer" session with state officials to provide more documentation intended to sway state officials to the city's point of view.

Sangiacomo said he's hearing from other cities that their meet and confer sessions generally also end in blanket "no's" from state staff. He said cities like Ukiah could well have to turn to the courts - as many California cities have already done - to protect what they see as legitimate expenses they bonded for as part of long range plans for infrastructure and economic improvements.

In the meantime, for the Costco project, the city has also begun a parallel process the state has put in place post-redevelopment, which allows cities to get special reviews of their development projects with an eye to coming up with a management plan for the project which would allow it to continue even without redevelopment. The city is using this process in the case of the Costco project. That process should be complete in the first quarter of 2013.

Also in the meantime, Costco is moving ahead with its environmental impact review for a new store in Ukiah.

Sangiacomo said that he is hearing from other city officials throughout the state that the dismantling of redevelopment has not brought the "fiscal windfall" the state had hoped for and that, in fact, it has stopped local infrastructure projects statewide.

"I don't think we have begun to see the economic impact of the loss of redevelopment," he said, adding that schools are not seeing the added funding they thought was coming either. Much of that is due, he said, to the fact that much of the money is still tied up in long term bonds the cities issued and will be repaying for years to come. Add to that, he noted, that cities like Ukiah are now spending more and more on staff time to navigate the state's mandates and deadlines on redevelopment and you have a losing formula.